Hong Leong in top three of bancassurance


BY YVONNE CHONG

FROM an insignificant bancassurance player just six months ago, Hong Leong Bank Bhd (HLBB) has climbed up the ranks to be among the top three players in the local market. As it continues with the momentum gained, HLBB is confident of emerging as a strong number two within the next five months. 

Its consumer branch banking manager Huan Woon Han told StarBiz that HLBB was fully committed to becoming a key player in the bancassurance market, as it fulfilled its mission to be a one-stop financial services centre. 

“We have more branches than Standard Chartered and we have a sizeable workforce. We’ll definitely surpass them and we’ll try to catch up with Maybank,” Huan said. 

Huan Woon Han

He admitted that there would be a lot of catching up to do as Malayan Banking Bhd, which pioneered bancassurance, was way ahead and had a bigger branch network. 

“In the last five months, we have been actively building up our sales force to sell bancassurance. By June, all branch managers and sales force would be fully equipped – trained and licensed – to sell bancassurance products,” Huan said. 

He said a bancassurance salesman had to have three insurance licence – to sell life, general and investment-link insurance. 

“Wealth management is to be handled professionally. It is not product pushing. Insu-rance is not so much the features, but the benefits,” he said. 

He said HLBB would have a team of personal financial consultants as well as a team of dedicated wealth management consultants. 

According to Huan, if the bank regards bancassurance as “by-the-way” products to be cross-sold to its customers, the move to promote bancassurance would fail. It has to be a core product range. Bancassurance not only broadens the bank's product range but also helps maintain loyalty, being long-term products. 

He said HLBB would tap on its large customer base, “leveraging on our CRM (customer relationship management) readiness; we have a rich EDW (enterprise data warehouse).” 

Bancassurance, which aims to “protect wealth,” is part of the HLBB wealth management services, together with other services, such as unit trusts which aim to “create wealth.” 

Wealth management services have become increasingly important for HLBB, as with other banks, as it seeks to beef up its non-interest income (NIN) product line, which includes transactional income such as those from trade financing and credit card. 

“The interest of loan income is thinning because of competition and we've been exploring on how to broaden the NIN. Wealth management – bancassurance and unit trusts – is one of the best avenues,” Huan said. 

HLBB now deals with unit trust funds from the Hong Leong group but is improving its infrastructure, which when in place, would enable it to distribute third party funds.  

Huan expects HLBB to be ready for third party funds in the next quarter but whether the bank introduces any would depend on several factors, such as market sentiment and the attractiveness of the funds against other funds in the market. 

He said the unit trust business was very much market-driven. 

HLBB bancassurance products are underwritten by its sister company Hong Leong Assurance Bhd (HLA) for life insurance while it has tie-ups with a few other insurance companies for general, such as Kurnia Insurans Bhd, Malaysian Assurance Alliance Bhd, Pacific and Orient Bhd

The bank’s strategy is to have its bancassurance products as simple as possible, targeting different market segments, and when possible, have them bundled with its other products. Its highest revenue contributor among bancassurance products is the mortgage reducing term assurance (MRTA) which it bundled with the mortgage loan. The policy is to help a borrower settle the mortgage in event of death. 

HLBB emphasises on straight-through processing, automating processes where it can to deliver policies fast. It aims to provide excellent sales and after-sales service with its dedicated sales team, CRM and dedicated call centre. 

“We're now focusing on investment link products, such as VentureInvest, VentureLife and VentureWoman. MRTA is bundled, so there’s not much selling involved. Investment-linked products need a lot of energy and selling skills,” Huan said. 

VentureInvest offers a choice of four investment funds managed by HLG Asset Manage-ment – HLA Venture Growth Fund, HLA Venture Blue Chip Fund, HLA Venture Income Fund and HLA Venture Dana Ittizan – and the option to switch as one’s needs changes, while covering the policyholder against death, total and permanent disability or diagnosing of 36 major illnesses. 

VentureLife offers an investment cum protection plan that is flexible enough to address various stages of one’s life, such as marriage, buying a home, starting a family, children’s education and retirement, while Venture-Woman is a investment-cum-protection plan especially for the women. The policyholders of these two funds can also access any of the four HLA funds. 

Today, it is launching a new product called Senior Care, a high-risk one-off product which would only be available for 2½ months. 

Bancassurance is slated for strong growth, and as such, most banks have either gone, or planned to go, into it big time. 

According to Huan, consumers preferred dealing with banks to dealing with insurance agents, mainly because it felt more secure.  

“Financial institutions are proven in their financial obligations. They are established and bankers are perceived to be more professional,” he said, adding that consumers also felt it was more convenient to conduct all their fi-nancial transactions under one roof. 

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